Beginning investors: Of course, the GOAL long term is to be in steady consistent investments that gradually increase over time. Minimize RISK. Embrace The Oracle of Omaha principle. "Buy companies, not stocks."
Alternatively, for those risk takers who wish to nudge/accelerate their short term results, especially in volatile markets, I heard a talk show personality say the other day that he took a small position in a high priced stock and considered it like an option CALL. I liked that analogy, especially in a situation where you are buying a few shares of AAPL, AMZN, FB or other stock that one has to pay more than a few dollars for. From there, the buying of a few shares will help you to focus and learn more about the company, track the stocks movement, and at the same time, give you a better understanding of either building/buying into a longer position, or selling to take shorter term profits and move on to another opportunity.
To minimize risk when first starting out, it's a good idea to cautiously diversify and not overly commit to any one stock/idea. When you find something that works, commit more on a graduating basis. Regarding options themselves, I generally invest in options with a one year expiration by first buying one or two contracts, then based on a result over time, I may buy more contracts, similar to expiration and price, or sell.
Being able to balance risk and reward is important when starting out as a new investor. Put the gambler in you on the sidelines and work to find opportunities that are relatively safe. Slowly build momentum, and as you gain confidence, take more incremental risks.
Alternatively, for those risk takers who wish to nudge/accelerate their short term results, especially in volatile markets, I heard a talk show personality say the other day that he took a small position in a high priced stock and considered it like an option CALL. I liked that analogy, especially in a situation where you are buying a few shares of AAPL, AMZN, FB or other stock that one has to pay more than a few dollars for. From there, the buying of a few shares will help you to focus and learn more about the company, track the stocks movement, and at the same time, give you a better understanding of either building/buying into a longer position, or selling to take shorter term profits and move on to another opportunity.
To minimize risk when first starting out, it's a good idea to cautiously diversify and not overly commit to any one stock/idea. When you find something that works, commit more on a graduating basis. Regarding options themselves, I generally invest in options with a one year expiration by first buying one or two contracts, then based on a result over time, I may buy more contracts, similar to expiration and price, or sell.
Being able to balance risk and reward is important when starting out as a new investor. Put the gambler in you on the sidelines and work to find opportunities that are relatively safe. Slowly build momentum, and as you gain confidence, take more incremental risks.
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